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Should the bakery make the purchase

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Question - A bakery is considering the purchase of a $10,000 mixer. The mixer has an economic life of ten years and will be fully depreciated by the straight-line method. The machine will produce 10,000 donuts per year, with each costing $2.00 to make and priced at $4.00. Assume that the discount rate is 10 percent and the tax rate is 20 percent. Should the bakery make the purchase?

Reference no: EM133093760

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